GOLD Has Replaced The Dollar As LOCAL CURRENCY OF CHOICE For Iranians

There’s a new ‘Forex market’ in Iran, and it shows something very interesting about what people do in a fiat currency crisis. Here’s more…

It’s no secret that past economic sanctions have hurt the value of the Iranian Rial.

Making maters worse for Iranians, after President Trump pulled out of the Iran ‘Deal’, the Rial absolutely nose-dived:

Granted, that’s the “official” exchange rate on that chart.

Just like in Venezuela, local exchange rates are much different, and it takes way more Iranian Rial to buy the U.S. dollar.

But it is also no secret that Iran is moving away from the dollar.

Recently, we have covered this topic here, here and here.

We’ve covered many facets of Iran, much more than just those three links above, but the point is that a currency crisis is a process that is ongoing, but what is clear is that the move away from the dollar is picking up speed.

And what are the Iranians turning to?

They are turning to gold.

Picture from article cited below –  An Iranian goldsmith counts his gold coins at a gold market in the main old Bazaar of Tehran.

Here’s more from Radio Farda (bold for emphasis and making points later):

Referring to the formation of a “new forex market,” the chairman of the Iran Gold & Jewelry Association, Hossain Pendarvand, says gold has replaced the dollar in local markets and that despite protective measures taken by the Central Bank of Iran (CBI), money is still finding its way out of the country, but now in the form of gold.

*****

 

After sliding for several weeks amid fears the U.S. would pull out of the nuclear deal, the Iranian rial hit an all-time low against the dollar after President Trump announced the withdrawal May 8. The next day, Iran’s national currency was trading on the black market for 75,000 rials to the dollar, despite the CBI having set an official rate of 42,000 rials to the dollar and a ban on exchange offices trading foreign currencies April.

There’s a couple points to make here-

From the first paragraph cited, we see that when faced with a currency crisis, the people will in fact resort to gold.

People learn quick, so when the inevitable fiat currency crisis reaches our shores, and when the U.S. dollar is collapsing, there is no reason to think that gold & silver won’t re-emerge themselves as local currencies at the very minimum, and probably much faster than many imagine.

And contrary to popular belief, there are people willing to buy and sell gold & silver in any town and any city, basically 24/7.

The second point I’d like to make comes from the second paragraph cited: Things are always worse than the government says.

Now before you say, “but Half Dollar, this is Iran we’re talking about, not the United States”.

I get it.

I also get the fact that our government lies to us continually as well, especially when it comes to matters of finance and economics.

From understating inflation to overstating employment and everything in between, not only are we being lied to just as much if not worse, but these lies are always skewed to paint a rosier picture than things really are.

In the case of Iran, since that is the focus here, the true, street level exchange rate to the dollar is almost twice as bad as is “officially” reported.

For those who doubt gold & silver will re-assert themselves, we see current, present day examples all the time proving to us that gold and silver will re-assert themselves, whether it has the support of the government or not.

And in spite of all the crypto hoopla.

When push comes to shove, people will choose survival in the safest and less risky way possible, which also includes, if I may tweak a catchy saying, “a gold coin in the hand is worth two crypto-coins on a USB”.

And I imagine the penalties of getting caught doing black market deals in Iran are fairly stiff.

Yet that still doesn’t deter or stop the people from protecting themselves.

Stack accordingly…

– Half Dollar


 

About the Author

U.S. Army Iraq War Combat Veteran Paul “Half Dollar” Eberhart has an AS in Information Systems and Security from Western Technical College and a BA in Spanish from The University of North Carolina at Chapel Hill. Paul dived into gold & silver in 2009 as a natural progression from the prepper community. He is self-studied in the field of economics, an active amateur trader, and a Silver Bug at heart.

Paul’s free book Gold & Silver 2.0: Tales from the Crypto can be found in the usual places like Amazon, Apple iBooks & Google Play, or online at PaulEberhart.com. Paul’s Twitter is @Paul_Eberhart.

***